23 december 2008

Prime Minister Vladimir Putin met with Deputy Prime Minister Dmitry Kozak

At the meeting, Vladimir Putin and Dmitry Kozak discussed the performance of the Housing and Utilities Fund and the Olympic preparations.

Transcript of the start of the meeting: 

Vladimir Putin: Let's start with the Housing and Utilities Fund. How is it going?

Dmitry Kozak: One of the measures that the Government took to secure sources of funding for the economy, help the regions, and resolve social problems, has been implemented. In line with the Government's plan of action drafted in the first decade of November, the State Duma has now passed a law. All the required decisions have been made, and the regions have already received the first funds. First applications have already arrived in the Housing and Utilities Fund. Four billion roubles have been earmarked to purchase housing for people living in hazardous dwellings, and another 2.6 billion roubles have been allocated for the same purpose, as part of co-financing the regions.

Vladimir Putin: How many apartments have been bought?

Dmitry Kozak: A total of 5,500 apartments have been bought in the Chelyabinsk Region, Bashkortostan, and the Penza Region. This will make it possible to resettle 15,000 people from 685 hazardous dwellings. This figure applies only to three regions.

Today, the fund is reviewing another nine applications for a total of 3.3 billion roubles. The regions are working actively. They are quickly reviewing the fund's applications, making it possible to tackle two problems at once - resolving the social problems of our people, and lending considerable support to the construction industry.

Vladimir Putin: How much time did it take you to resettle 15,000 people?

Dmitry Kozak: They have not been resettled yet. The flats that have been bought for them will be ready in half a year.

Vladimir Putin: All right. How long did it take you to purchase these flats?

Dmitry Kozak: We bought them in one month, during which the law was adopted in three readings. However, if you are referring to the allocation of funds to the regions, we did this within a week of receiving their applications. We reviewed these applications and programmes, and earmarked the funds. In two days we conducted a tender for the purchase of flats, and summed up its results today.

Vladimir Putin: Now you should do the main thing - make sure that people receive these flats.

Dmitry Kozak: The mechanism is very transparent. Before receiving money for the purchase of flats, the regions submit resettlement programmes to us in which every flat, every hazardous dwelling, and every family is mentioned. The website of the Housing and Utilities Fund has published information on all flats financed from its budget, and not only that regarding hazardous dwellings, but also the entire programme to reform the housing and utilities sector. All this is rather transparent.

Over the same period, to secure sustainable economic development and help different industries, the fund has deposited its free capital, 15 billion roubles, in the commercial banks that the Central Bank considers reliable on the condition that banks use this money to finance the priority industries of the real economy.

The tender for 15 billion roubles was held on December 11, and the banks took a very active part in it. This was the first tender on the following terms: in a month, banks must present new loan agreements with national legal entities for half of this sum. This is a problem today. Five banks have received 15 billion roubles worth of loans, and will have to report on how they spent this money in a month. There were many apprehensions that these additional terms would lower the interest rate, or that inflation would be rampant, but they were not justified. We deposited these 15 billion roubles at the highest possible interest rate, more than 13% per year. Everything is fine. We are going to deposit another 10 billion roubles on the same terms.

Vladimir Putin: This is expensive for the economy. Maybe, this is fine for your fund, but the banks' clients will have to pay too much.

Please, tell me about the Olympic preparations.

Dmitry Kozak: The main task today is to streamline spending. We are reviewing the fourth version of the budget to reduce expenses on building sports facilities, and, most importantly, on the Olympic infrastructure that is the most expensive.

We have come to the conclusion that the initial costs of implementing the programme can be reduced by 33.5%. We will continue working on that. We have set ourselves the task to put together the Olympic budget through 2014 before January 15, based on flexible price formation to allow us to orient ourselves to the market and minimise government spending.